On 5 July 2018 Djibouti time, the grand opening ceremony of Djibouti International Free Trade Zone ("DIFTZ"), which was jointly developed by China Merchants Group ("CMG"), China Merchants Port Holdings Company Limited ("CMPort") and the Government of Djibouti, was held.
The President of Djibouti Mr. Ismaïl Omar Guelleh, President of Ethiopia, Rwanda, Somalia and Sudan, Chairperson of African Union Commission Mr. Moussa Faki Mahamat, Chairman of the Djibouti Ports and Free Zones Authority Mr. Aboubaker Omar Hadi, Chinese Ambassador of Djibouti Mr. Fu Huaqiang, Deputy General Manager of CMG and Vice Chairman of CMPort Dr. Hu Jianhua, Chairman of China Merchants Shekou Industrial Zone Holdings Co., Ltd Mr. Sun Chengming, Managing Director of CMPort Dr. Bai Jingtao, Deputy General Manager of Dalian Port Group Mr. Xu Jian, and many other Chinese and overseas guests attended the ceremony.
Djibouti has become, with strong support from the Chinese government and the Djiboutian government, a pilot project for overseas comprehensive development of CMG, which is an improvement innovation of summarizing and reproducing the ''Port-Park-City'' ("PPC") model. It is a remarkable milestone on implementation of CMPort's overseas strategy in Africa.
Djibouti, one of the developing countries along the "Belt and Road", has similar infrastructure with Shenzhen Shekou when it has became the pioneer of China's historic journey of reform and opening up. In 2013, CMPort invested in Port de Djibouti S.A. ("PDSA"), becoming its second largest shareholder. Since then, CMPort has been actively participating in and has witnessed the rapid development brought by the Shekou development model from the commencement of construction of DIFTZ in 2017 to the opening ceremony today. In May 2017, Djibouti Doraleh Multi-purpose Port ("DMP") has officially commenced operation which helps to enhance the growth of Djibouti. In the near future, while the brand new free trade zone attracts more businesses, the old port zone in downtown will undergo renovation and development in order to achieve the goal of reproducing PPC model in Africa.
At the opening ceremony, a licensing granting ceremony was held by Mr. Aboubakar Omar Hadi and Dr. Hu Jianhua for granting operating licenses to the enterprises in DIFTZ.
Mr. Ismaïl Omar Guelleh, President of Djibouti expressed his gratitude to CMG by emphasis CMG's efforts to DIFTZ will bring prosperity to the Djiboutian people, not only increase job opportunities, but more importantly, attracted export processing industry which provides "Hematopoiesis Function" for the Djibouti economy.
A heartfelt congratulation was delivered by the Chinese Ambassador of Djibouti Mr. Fu Huaqiang. He pointed out that China and Djibouti have been continuously deepening their cooperation across all aspects. Djibouti will become an important pivot under the "Belt and Road" initiative. When DIFTZ commence operation, more and more Chinese enterprises will invest in Djibouti, which will further enhance bilateral economic and trade cooperation between the two countries.
Deputy General Manager of CMG and Vice Chairman of CMPort Dr. Hu Jianhua said, "As an enterprise with a hundred year of history, CMG is the important participant and promoter of China's "Belt and Road" initiative. Dr. Hu is fully confident with the success of the DIFTZ project, the implementation of PPC model in Djibouti, as well as the similar "common destiny" model to promote in other African countries.
PDSA in Djibouti handled container throughput of approximately 4.4 million TEUs and bulk cargo volume of approximately 25 million tons from 2013 to 2017, resulting in a cumulative profit of US$465 million. Its annual profit has exceeded US$100 million for three consecutive years from 2015 to 2017. Cash dividend of approximately US$300 million have been delivered to shareholders, and taxation of about US$42 million have been paid to the government. Moreover, the local employees' income has been increasing steadily, over the past 5 years, composite salary growth rate per capita per year was over 7%. Thanks to all positive contributions, the government of Djibouti is keen to further cooperate with CMPort as well as DIFTZ in a comprehensive manner to foster the development of port and logistics industries."
Being the future "Largest Free Trade Zone in Africa", DIFTZ covers a total area of 48.2km². The starting phase of 6km² area has completed construction with basic infrastructure with more than 20 enterprises from Africa and China has signed their letter of intent. When all phases of the master plan of DIFTZ are completed, it can generate over US$4 billion of GDP in Djibouti, which is more than double of its current GDP. More than 100,000 jobs could be created, accounting for over one-sixth of Djibouti's working population.
